Soda Industry Cashes In on Govt. Food Assistance Programs to Tune of $4 Bilion a Year

The debate over dropping junk food from the nation’s biggest nutrition program cuts across the political spectrum in unpredictable ways.

Photo Credit: Adisa/ Shutterstock.com

May 7, 2013 |

As Congress resumes its wrangling over a long-overdue Farm Bill, conservatives are once again attacking their long-time bête noire, the Supplemental Nutrition Assistance Program. They’re threatening SNAP (formerly known as the Food Stamp Program and by far the biggest item in the Farm Bill) with everything from mandatory work requirements for participants to deep program-wide budget cuts.

Once the Farm Bill has passed and all the political flatulence has cleared, though, budget hawks and Tea Partiers are unlikely to have succeeded in undermining SNAP. With the economy stagnating, unemployment and inequality festering, employers refusing to pay living wages, and one American in six now facing food insecurity, the bulk of public opinion is behind beefing up food assistance rather than gutting it.

But even among its fans and beneficiaries, there is recognition that SNAP could use some updating, especially with regard to its nutritional impact. So state governments from South Carolina to Maine to Wisconsin are considering legislation that would prohibit the purchase of soft drinks or other junk foods with SNAP credits.

Proposals for deploying food assistance as a tool to influence consumers’ buying decisions are deeply controversial. And the debate over whether or not to drop nutrition-free items from the nation’s biggest nutrition program cuts across the political spectrum in often unpredictable ways.

A sweet deal for Big Soda

Calls for an end to the soft-drink subsidy are coming from academia as well as from statehouses. A 2011 commentary last year in the Journal of the American Medical Association argued,

The government purchases millions of servings of sugar-sweetened beverages for SNAP participants each day. This practice arguably erodes diet quality and promotes chronic illness among individuals who are at increased risk of obesity-related disease because of limited financial resources.

Around the same time, a white paper from the Arizona State School of Nutrition and Health Promotion included this statement:

Restricting options for purchase of unhealthy foods can be a powerful strategy for improving diets of SNAP recipients. There is strong scientific evidence for a restrictive strategy, and there is precedence from other federal programs such as WIC [the Special Supplemental Nutrition Program for Women, Infants, and Children and NSLP [the National School Lunch Program], which limit benefits to the purchase of foods that are considered healthy.

Michael Jacobson of the Center for Science in the Public Interest, which has long advocated tight controls on the soft-drink industry, wrote last year, “To do nothing—while sugary drinks fuel an epidemic of obesity and other expensive diseases—would be reckless from a public health and fiscal standpoint.” Meanwhile, Daphne Hernandez, an assistant professor in the Human Development Department at Penn State, stated the case even more bluntly: “Continuing the use of taxpayer dollars to fund the purchase of soda through SNAP undermines the goal of SNAP.”

Advocates for limiting the range of products that benefits can buy have generally focused their efforts on carbonated drinks. For one thing, the sweet sodas make a nice fat target; the manufacturers rake in an estimated $4 billion per year from SNAP sales alone. Their products have a hefty impact, both nutritional and economic, and they could be easily identified and segregated automatically at checkout through SNAP’s electronic benefit transfer (EBT) card.

Joining the chorus of demands for restrictions are some right-wing activists and legislators—people who would not seem to have the nutritional status of SNAP participants uppermost in their minds. Accusing soda manufacturers of “SNAPping up welfare dollars,” David Alamasi of the National Center for Public Policy Research, a scandal-ridden antigovernment group, asserted last month that although he’s “a vocal proponent of Coca-Cola’s right to sell any and all of its products,” he doesn’t want them being purchased with what he regards as his money. “When it comes to public assistance,” he stated in a press release, “I want people buying what they need with my money and not what they desire.”

Republican legislative proposals in Wisconsin, Florida, and some other states have taken aim at all processed foods that contain more negative than positive nutrition. State senator Ronda Storms introduced Florida’s bill last year. It would have barred consumers from using SNAP benefits to buy “nonstaple, unhealthy foods.” Storms told the Los Angeles Times, “If we’re going to be cutting services across the board, then people can live without potato chips, without store-bought cookies, without their sodas.”

Despite support from the ideological Right, Storms’ bill failed thanks to fierce corporate lobbying. The big soft-drink manufacturers, of course, work hard against all such legislation, but so do other corporate interests that rake in SNAP profits. The bill was attacked by lobbyists for the Snack Food Association, Corn Refiners of America, Florida Petroleum Marketers, the Convenience Store Association, and the Frozen Potato Products Institute.

When it comes to nutritional criteria for SNAP-eligible products, both support and opposition can span the full range of political ideologies. Proposed restrictions have been condemned by many food banks and economic-justice organizations, who argue that it’s paternalistic and unfair for the government to try to dictate the food purchases of low-income families while everyone else is left to choose freely. They argue that such reforms would take us back to the bad old days before the EBT card, when people using federal food coupons faced a potentially humiliating ordeal with every trip through the checkout line. Regarding proposed restrictions on Wisconsin’s SNAP-funded program, a food-bank executive argued, “Rather than creating hurdles, the state should make healthy food more affordable.”

Most of the opposition to a soda ban among food-rights groups is indeed aimed at protecting the interests of SNAP participants. But in some cases, motives appear to be more problematic. In a 2011 report, the Washington, D.C.-based Food Research and Action Council maintained that purchasing restrictions would have many harmful impacts, among them an increase in “confusion and stigma at grocery check-out, potentially causing a decline in SNAP participation that could worsen food insecurity.” But FRAC, a consistently strong defender of food assistance, itself receives funding from a who’s-who of SNAP’s agribusiness and corporate food beneficiaries, among them the Coca-Cola Company, Pepsico, Inc., Mars Incorporated, the Sara Lee Foundation, and Walmart.

Meanwhile, the US Department of Agriculture, which administers federal food programs, has resisted any further tightening of food eligibility, on the grounds that classifying tens of thousands of types of food and keeping up with a constant deluge of new products would be a bureaucratic nightmare. Department researchers claim that “there are no widely accepted standards to judge the ‘healthfulness’ of individual foods”; that the “ingenuity of the food industry to develop new ones (for example, a prohibited candy bar adapted into a chocolate ‘granola bar’)” would always keep junk food a step ahead of any attempted regulation; and that “responsibility for enforcing compliance would rest in the hands of employees at check-out counters in 160,000 stores across the nation,” something considered unworkable.

USDA cites its own studies showing that dropping soda from SNAP would not significantly reduce consumption by low-income families. Most SNAP recipients use cash to buy a portion of their monthly food supply, and if restrictions were imposed, argues USDA, people would simply shift junk food over into their cash budget.

Who’s buying all that junk anyway?

It’s important to note that brisk sales of soda and other junk foods are not linked exclusively or even primarily to poverty. Households with incomes above $70,000 spend about 35 percent more each month on fruits, vegetables, meats, grains, and dairy products than do the lowest-income households; however, they also spend almost 80 percent more on what USDA calls “other foods” – a category that includes mostly less nutritious foods: “frozen prepared meals, … packaged prepared foods, snack foods, … , sugar and other sweets, fats and oils,” and, of course, soft drinks.

USDA’s figures show that middle- and upper-income Americans are 14 percent more likely to consume sweets daily and 23 percent more likely to consume salty snacks every day than are food-stamp recipients. Thus, says USDA, “the basis for singling out low-income food stamp recipients and restricting their food choices is not clear.”

But in other contexts, USDA apparently does believe in singling out low-income people. The second and third largest food assistance programs after SNAP—NSLP and WIC—both are designed to steer their recipients toward more nutritious diets. Smaller programs include the SNAP Nutrition Education program; a Community Food Projects Grant Program for low-income areas; the Healthy Urban Food Enterprise Development Center, aimed at extending access to nutritious food into urban “food deserts”; and expansion of electronic SNAP benefits in the Farmers’ Market Promotion Program.

Finally, under USDA’s Healthy Initiatives Pilot project, SNAP participants in Hampden County, Massachusetts are having 30 cents added to their monthly benefit for every dollar they spend on fruits and vegetables. There is talk, broadly supported, of extending this incentive to all SNAP participants.

Yet none of these federal nutrition programs is popular with hardline conservatives, because they all would expand food assistance rather than shrinking or eliminating it, and they encourage consumption of healthful foods without explicitly discouraging consumption of unhealthful ones.

“Informal rationing”

People living in poverty today are having to spend a punishing 37 percent of their income just to feed their families. That compares with 9 percent spent by households earning $70,000 or more. For millions of families, losing SNAP would mean coming up short in their struggle to cover rent or house payments, utility bills, transportation costs, and other necessary expenses.

But the fact that more than 15 percent of Americans now depend on SNAP has raised the blood pressure of right-wing lawmakers who resent having to spend tax dollars to help keep Americans fed and housed. The 2013 budget proposed by House Budget Committee chair Paul Ryan (R-WI) would strip $135 billion from the program over the next ten years. But such crippling cuts are unlikely. Farm-state members of Congress and their friends in agribusiness, who have been crucial to keeping the program alive for almost fifty years, will continue to protect USDA’s two dozen food assistance programs, among which SNAP is the biggest. SNAP also receives unconditional political support from the big banks, led by JPMorgan Chase, whom the states grant contracts worth hundreds of millions of dollars to administer the EBT system.

Blocked from completely gutting SNAP, conservatives are resorting to harassment of those who participate in the program. Congressional Republicans are pressing for mandatory enforcement of a work requirement that would apply to all SNAP recipients–this in an economy that is already incapable of providing enough jobs. The Pennsylvania legislature reinstated an “asset test” that would drop from the SNAP rolls low-income recipients who have modest savings. A bill was introduced recently in the North Carolina statehouse that would require criminal background checks on applicants. And the right-wing media are trying to undermine SNAP by falsely claiming that the Obama administration “is promoting food stamps in Mexico.”

All of this is part of campaign by Republican lawmakers to hamstring federal assistance programs—an attempted repeat of what they accomplished in the two decades leading up to the 2008 financial crash, when the government erected a series of increasingly stringent bureaucratic hurdles the purpose of which, according to legal scholar David Super, was to achieve “informal rationing” of benefits through the “personal choice model.” In other words, the government makes it such a hassle to obtain assistance that eligible applicants will just decide it’s not worth it.

But the deepening of poverty and food insecurity over the past five years prompted the federal government to start tearing down many of those obstacles. For example, most states relaxed SNAP’s eligibility rules, in order to catch families before they fall below the poverty line and exhaust all of their savings. States have developed “SNAP outreach plans” and hired recruiters to let poor and borderline poor families know they are eligible. And some states are allowing food-stamp purchases at farmers’ markets.

Alternatives to the soda subsidy

It is those efforts to strengthen food security that are so upsetting to Republicans, and that position puts them badly at odds with public opinion. A study published in last December’s issue of the journal Public Health Nutrition estimates that 77 percent of Americans would like to see SNAP funding either increased or kept steady. When people were asked about a range of possible policy changes, the most popular, with the support of 82 percent of respondents (including 76 percent of Republicans and 86 percent of SNAP participants), was “a proposal to provide additional money to SNAP (Food Stamp) participants that can only be used on fruits, vegetables or other healthful foods.”

A proposal to make sugary drinks ineligible for SNAP purchase was supported by 69 percent of all respondents and by 54 percent of SNAP participants themselves. If the soda ban was linked to a financial incentive to buy more fruits and vegetables, a whopping three-quarters of SNAP participants were in favor of it.

While many economically stressed parents might be relieved to have a new way to deal with their sugar-happy kids—by telling them, “No, don’t put that Mountain Dew in the cart, because our card doesn’t cover it” —people will probably tolerate only so much government intrusion into shopping decisions. And some of the more drastic health-promotion initiatives now under discussion might cross that line.

For example, the Physicians Committee for Responsible Medicine recommends that SNAP benefits pay only for a prescribed list of 28 specific food items. According to PCRM, “SNAP beneficiaries who limit their food purchases to these Healthy Basics and eat no other foods at all can easily achieve nutrition that is complete and superior to that of average Americans.” They are probably right about their list’s healthfulness, but it appears to have been compiled solely on the basis of nutrient concentrations and is bizarrely idiosyncratic. PCRM’s plan would permit SNAP to cover only five grain products: high-fiber bread, brown rice, quinoa, rolled oats and whole-wheat pasta. The only allowable legumes would be black or garbanzo beans, dried red lentils, and (no joke) frozen edamame. But not to worry: balsamic vinegar and cinnamon would also be allowed.

Other groups, in particular the D.C.-based Center for the Study of the Presidency and Congress, have suggested some much more practical enhancements to SNAP that would amplify the benefits of a soda or junk-food ban.

Protect and, if necessary, augment the program’s current funding.

Make children’s health a stronger focus (an approach suggested by the fact that an astonishing one out of every two young Americans will receive SNAP benefits at some point before turning nineteen).

Expand SNAP access at farmers’ markets, and encourage it by providing free or subsidized wireless terminals to handle the transactions (preferably without a subsidy to JPMorgan).

Reduce the prices of nutrient-dense foods and provide incentives to buy them.

Require stores, if they want to be certified as SNAP retailers, to stock more healthful foods and to market them more effectively.

There is little reason to expect any of these reforms to be adopted in the upcoming Farm Bill; Congressional SNAP supporters will be wholly focused on defending current benefits against cuts. But if individual states continue to propose creative experiments in improved nutrition, expanded access to farmers’ markets, and cutting predatory corporations out of the food chain—and if the feds don’t block those initiatives—more Americans will have a chance to stay better fed until our food economy can be transformed in more fundamental ways.

Stan Cox is a senior plant breeder at the Land Institute in Salina, Kansas. His book Any Way You Slice It: The Past, Present, and Future of Rationing was published this month by the New Press.